The South African Reserve Bank held its repurchase rate at 7.00% on Thursday, keeping the prime lending rate at 10.50%, in a split 4-2 vote of the Monetary Policy Committee that saw two members favour a further 25 basis-point hike.
The committee said the current policy stance remained appropriate for now, describing rates as 'somewhat restrictive' in a statement issued alongside the decision, and confirmed that its next scheduled statement would be released on 23 September 2026.
SPLIT VOTE ON POLICY PATH
The decision surprised markets and analysts, many of whom had expected a rate increase. The two dissenting members preferred a further 25 basis-point hike, according to the monetary policy statement published on the SARB website following the announcement.
Inflation reached 5.0% in June 2026, well above the 3% point target the central bank has adopted at the lower end of its previous 3% to 6% tolerance band. Governor Lesetja Kganyago said the bank's main contribution was "to stabilise inflation in line with our 3% target, over time", adding that "the MPC will act as needed".
Prime lending rates for households and businesses will remain at 10.50%, unchanged from the level prevailing before the meeting. The repurchase rate of 7.00% keeps South African monetary policy at a level the committee characterised as somewhat restrictive.
NEXT DECISION IN SEPTEMBER
The committee's next scheduled statement is set for 23 September 2026. Citi economist Gina Schoeman described the decision as "a hawkish hold".
Kganyago pointed to upside risks to inflation from higher oil prices amid volatility in the Middle East.
The full statement of the Monetary Policy Committee was published on the SARB's website following the announcement.
Schoeman said "the currency weakened very quickly" after the announcement.
Citi said it expected the SARB to raise rates at its September meeting.